GST Update: Appeals Now Allowed Against NIL or Zero Demand Orders

GSTN has removed a portal-level restriction that earlier prevented taxpayers from filing appeals against certain GST orders showing “NIL” or “Zero” demand. The change is relevant where the underlying tax liability remains disputed even though the amount was paid before the demand order was issued.

What Has Changed?

As per the GSTN Advisory dated 7 September 2026, taxpayers can now file an appeal in Form GST APL-01 against demand orders reflecting NIL or Zero demand in the circumstances covered by the advisory.

The issue generally arose where:

• A taxpayer disputed the proposed tax liability.
• Tax, interest or penalty was paid before the adjudication order was issued, without necessarily accepting the underlying liability.
• The adjudicating authority subsequently passed the order.
• Since the amount had already been paid, the demand reflected on the GST portal as NIL or Zero.
• The portal validation then prevented the taxpayer from filing an appeal.

GSTN has now removed this portal restriction.

Why Was This a Problem?

The earlier portal behaviour created a practical difficulty for taxpayers.

In its earlier Advisory dated 3 April 2026, GSTN had explained that such cases could result in a zero-value entry in the Demand and Collection Register because the amount had already been paid. When taxpayers subsequently attempted to file Form GST APL-01, the portal could prevent filing because the disputed amount could not exceed the demand amount reflected in the system.

The April 2026 GST Council Newsletter also recorded this issue and advised taxpayers to seek rectification so that the correct demand could be reflected before filing an appeal.

The September 2026 update removes this particular portal-level hurdle.

What Can Taxpayers Do Now?

Where the following circumstances apply:

1. The taxpayer continues to dispute the underlying liability;
2. Payment was made before issuance of the demand order; and
3. The resulting order reflects NIL or Zero demand,

the taxpayer can now attempt to file Form GST APL-01 electronically against the order.

This is particularly relevant for businesses that had previously been unable to proceed with an appeal because of the portal validation.

Statutory Right of Appeal Under Section 107

Section 107 of the CGST Act, 2017 provides a statutory right of appeal to a person aggrieved by a decision or order passed by an adjudicating authority.

Under Section 107(1), an appeal is generally required to be filed within three months from the date on which the decision or order is communicated to the taxpayer. The Appellate Authority may allow a further period of one month where sufficient cause prevented timely filing.

Rule 108 of the CGST Rules provides for filing an appeal to the Appellate Authority in Form GST APL-01.

Therefore, taxpayers should not assume that the removal of the portal restriction extends the statutory limitation period. The applicable time limit should be reviewed carefully before filing.

What If the Portal Still Shows an Error?

If a taxpayer continues to face difficulty while filing an appeal against a qualifying NIL or Zero demand order, GSTN has advised taxpayers to raise a ticket with the GST Helpdesk.

It is advisable to retain relevant order details and screenshots of any portal error while reporting the issue.

Key Takeaway for Businesses

A NIL or Zero amount appearing as the outstanding demand does not necessarily mean that there is no dispute regarding the underlying tax liability.

The GSTN Advisory dated 7 September 2026 removes the technical portal restriction for the specific circumstances covered by the advisory and allows taxpayers to pursue the appeal through Form GST APL-01.

Businesses that previously could not file an appeal because their order showed NIL or Zero demand should review those cases and consider the appropriate appellate action within the applicable time limits.

Conclusion

The latest GSTN update addresses an important procedural difficulty in GST appeal filing. Taxpayers with disputed liability and NIL or Zero demand orders should review their cases, verify the applicable limitation period and proceed with Form GST APL-01 where eligible.

If technical issues continue on the GST portal, taxpayers can raise a ticket with the GST Helpdesk.

For expert guidance on this topic, contact your tax professional today.